Allegations of corruption in award of $$B contract…Gov’t will respect findings of IDB probe

Allegations of corruption in award of $$B contract…Gov’t will respect findings of IDB probe – Minister Patterson

Jan 06, 2017 News

Government will respect the findings and recommendations of an investigation that is currently being carried out by an anti-corruption arm of the Inter-American Development Bank (IDB) into a major electricity project.

Minister David Patterson

On Wednesday, during an end-of-year press briefing of the Ministry of Public Infrastructure, Minister David Patterson, admitted that there has been a complaint filed to the Office of Institutional Integrity (OII), an independent arm of the Inter-American Development Bank (IDB).
He said that as far as he is aware, the project in question has not been halted.
“I was informed that it generally takes one month and that time is rapidly expiring. Due process will prevail and we will respect whatever the results,” he said.
The project in question is a US$18M-plus one to run new low and medium voltage transmission lines along the coast and the installation of at least 25,000 new metes. It is targeting an improvement of the efficiency of the Guyana Power and Light Inc. (GPL).
However, the controversial project was thrown in limbo after one of the bidders complained that the evaluation process was corrupt and that the winner, China National Machinery Import and Export (CMC), should not have qualified.
The aggrieved bidder, Colombian-owned Enrique Lourido, which has partnered with local contractor, Fix It Depot, is also insisting that it is highly questionable that the Government of Guyana has agreed to pay CMC $1B over the engineer’s estimate, despite other bidders being qualified and lower in the tender amounts.
The bidder is expected to be joined by at least one other company in its protests in the coming days.
The project, part of a bigger one to improve the technical efficiency of GPL, has been generating attention locally, not only because of the billions of dollars involved, but with questions raised over the procedures to evaluate the bidders.
The tenders of the rehabilitation project had been opened since February, and were only reportedly granted Cabinet’s no-objection a few weeks ago – more than nine months later.
There has been no official signing of the contract with CMC, the Chinese company that was reportedly awarded the project, as is normal with a state project of this magnitude. It is unclear whether CMC has received any monies as yet.
An investigation by the IDB’s anti-corruption and anti-fraud would have effectively halted any disbursements.
The IDB has been known to blacklist contractors and ask for retenders when fraud and other irregularities are found with the projects it is funding.

IDB is expected to take into account a critical consultant report on the construction of seven sub-stations and two power submarine cables by CMC.

The Parliamentary Opposition has already slammed the delay of the award, noting that it was taking too long and that it appears that something was wrong.
Guyana officially learnt of the award when questions were posed to Minister of Public Infrastructure, David Patterson, during considerations of the national budget in the National Assembly. Patterson said that CMC was the lowest responsive bidder – meaning they would have satisfied all the requirements to be a successful bidder.
According to Patterson, the contract is a part of a much larger contract for US$64M and at the time of the tender this was the engineer’s estimate. But there was a delay in terms of the assessment. So “when the assessment was done, the cost was determined by the evaluators to be fair and they were recommended to us, not only to the government of Guyana but also to the IDB as well as the EU”.
Both the IDB and the European Union (EU) are funding the US$64M power projects.
The aggrieved bidder claimed that, in breach of current procurement requirements, they were never told that they were disqualified or informed that an award was made.
Five companies tendered for the project – China National Machinery Import and Export/Sino Hydro Corporation (China) – $7.1B; Multi Electrical System N.V. (Suriname) – $6.4B; China National Machinery Import and Export (CMC)/China Sinogy Electric Engineering Co. Limited – $4.6B; Cummings Electrical Limited – $3.67B and Enrique Lourido/Fix it Depot- $3.5B.
The award to the Chinese company had raised eyebrows, since the company was involved in the construction of seven sub-stations, running new high-powered transmissions along the coastland and the laying of two submarine cables across the Demerara and Berbice rivers.
The cable which was laid across the Demerara River was damaged in July under unknown circumstances. This left the East Demerara and Berbice areas without additional power being supplied by the new Vreed-en-Hoop power station for a number of months. It was only fixed recently.
A key report by CEMCO, the local engineering company that supervised that project, had criticized the quality of work of CMC, including the laying of the submarine cable in the Demerara River.